French lawmakers gut Hollande's transparency bill

PARIS (Reuters) - French lawmakers on Tuesday diluted plans to make politicians declare their wealth and backed harsh penalties for journalists who publish the information, in an embarrassing setback for President Francois Hollande's transparency drive.

Hollande's government, reeling from the resignation of a budget minister over a secret Swiss bank account, drafted a bill in April to force politicians to declare their assets, income and potential conflicts of interest to an independent authority.

But worried about their privacy, lower house lawmakers, including from Hollande's own Socialist Party, voted in favor of an amended version of the bill that would only provide the information to people who specifically requested it and would ban publication of the details.

In a move likely to make reporters think twice about using the declarations for stories, any breach of the ban would be subject to a jail sentence of one year and could lead to a fine of 45,000 euros ($58,800).

The original legislation was aimed at making the French political system one of the most transparent among Western countries and restoring voter confidence after the scandal over Jerome Cahuzac's undeclared Swiss account.

The bill is part of a package of legislation that aims to clamp down on fraud and corruption, notably by stepping up the powers of tax inspectors and customs agents.

The legislation also beefs up penalties for serious fraud and grants legal protection for whistleblowers on economic and financial crimes. Previously only those exposing organized crime had enjoyed such protection.

Under the legislation, any countries that refuse to share tax information automatically with France will be put on a blacklist of uncooperative tax havens from 2016.

The package will be reviewed by the upper house, the Senate, next month before returning to the lower house for a final vote. ($1 = 0.7649 euros)